The UK automotive industry is urging the European Union to preserve close manufacturing integration with Britain as Brussels advances new industrial policies designed to strengthen European supply chains and accelerate domestic electric vehicle production.

The Society of Motor Manufacturers and Traders (SMMT) has warned that proposed EU “Made in Europe” measures could unintentionally damage one of the world’s most integrated automotive manufacturing relationships if UK operations are excluded from future incentives and industrial support mechanisms.

The concerns centre on the EU’s proposed Industrial Accelerator Act (IAA), a key part of the bloc’s wider “Made in Europe” strategy aimed at strengthening European manufacturing, accelerating decarbonisation and improving competitiveness against the US and China.

The SMMT recently met EU representatives in Brussels to discuss how the proposed legislation could affect cross-border automotive manufacturing and whether UK operations would remain eligible for support linked to the “Made in Europe” framework.

The industry body argues that the UK and EU automotive sectors remain fundamentally interdependent despite Brexit, with the EU exporting over €9bn worth of automotive components to UK manufacturers every year, making Britain the largest single export market globally for EU automotive parts.

These flows include battery systems, electric motors, traditional powertrain components, electronics, body panels and high-value engineered parts that move repeatedly between the UK and EU during the manufacturing cycle.

The wider UK–EU automotive relationship is now estimated to be worth around €80bn annually, while UK factories remain the EU’s largest export market for passenger vehicles, worth almost €40bn per year to European manufacturers.

SMMT chief executive Mike Hawes said. “Brexit put the resilience of our shared industry under enormous stress, but manufacturers have overcome those challenges to grow our trade in electrified vehicles alone to record levels.”

The organisation argues that excluding UK operations from future “Made in Europe” incentives could weaken both UK and EU manufacturing competitiveness by disrupting deeply integrated supply chains that have evolved over decades.

The proposed Industrial Accelerator Act forms part of a broader shift towards more interventionist industrial policy across major global economies.

The EU’s objective is to accelerate decarbonisation, strengthen domestic manufacturing capability and reduce strategic dependence on overseas supply chains, particularly in areas linked to electric vehicles, batteries and advanced technologies.

The concern for UK manufacturers is whether British suppliers, assembly operations and associated supply chains would qualify for the same incentives and support structures as EU-based competitors.

The SMMT has warned that excluding UK operations from the framework could create new friction across automotive supply chains at precisely the moment manufacturers are trying to accelerate investment into electrification, battery production and low-emission vehicle technology.

The debate also comes as the automotive industry adapts to increasingly fragmented global trade conditions.

Following the 2025 UK–US trade agreement, the United States became the UK’s largest export market for cars, with more than 101,000 UK-built vehicles shipped to the US during 2024, worth around £7.6bn. The agreement reduced US tariffs on British-built vehicles from 27.5% to 10% within a quota of 100,000 vehicles, providing important support for premium and luxury manufacturers serving the American market.

At the same time, European automotive manufacturers continue pushing for progress on EU–US trade negotiations amid concerns that tariff disputes and industrial competition could create further instability across international manufacturing networks.

Despite these global shifts, UK automotive leaders continue to stress that Europe remains operationally critical from a manufacturing, sourcing and logistics perspective.

Metro supports automotive manufacturers, suppliers and aftermarket businesses with integrated freight forwarding, customs support and multimodal logistics solutions designed for highly time-sensitive international supply chains. 

From UK–EU customs coordination and inbound production logistics to time-critical component distribution and international freight management, Metro helps automotive customers maintain continuity across complex manufacturing networks operating under changing regulatory and trade conditions.

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